Mitch Mac Donald has more than 30 years of experience in both the newspaper and magazine businesses. He has covered the logistics and supply chain fields since 1988. Twice named one of the Top 10 Business Journalists in the U.S., he has served in a multitude of editorial and publishing roles. The leading force behind the launch of Supply Chain Management Review, he was that brand's founding publisher and editorial director from 1997 to 2000. Additionally, he has served as news editor, chief editor, publisher and editorial director of Logistics Management, as well as publisher of Modern Materials Handling. Mitch is also the president and CEO of Agile Business Media, LLC, the parent company of DC VELOCITY and CSCMP's Supply Chain Quarterly.
Steve Geary is adjunct faculty at the University of Tennessee's Haaslam College of Business and is a lecturer at The Gordon Institute at Tufts University. He is the President of the Supply Chain Visions family of companies, consultancies that work across the government sector. Steve is a contributing editor at DC Velocity, and editor-at-large for CSCMP's Supply Chain Quarterly.
To get an idea of the complexity of Alan Estevez's job, you only have to look at the length of his title. Estevez is the principal deputy assistant secretary of defense (logistics & materiel readiness) in the office of the secretary of defense and has served as the acting assistant secretary of defense (logistics & materiel readiness) since April 2009. What that means is that Estevez is the most senior official in the Department of Defense (DOD) devoted to supply chain, distribution, transportation, product support, and logistics issues.
While that may tell you something about what Estevez does, it doesn't begin to convey the scale of the operation he oversees. But the following comparison might provide some perspective: If DOD logistics were a private-sector business, Estevez would be the CEO of a company with close to $200 billion in annual revenue. That would place it in the top 10 of the Fortune 500.
Estevez is a civil servant who has spent his entire career in military logistics, beginning in 1981 at the Bayonne Military Ocean Terminal. He received a Bachelor of Arts degree in political science from Rutgers University in 1979 and a master's degree in national security resource strategy from the Industrial College of the Armed Forces in 1995.
Estevez spoke recently with DC VELOCITY Group Editorial Director Mitch Mac Donald and Editor-at-Large Steve Geary about the challenges the Department of Defense currently faces.
Q: Can you help our readers understand the scale of DOD logistics?
A: Last year, fiscal year 2009, we probably spent about $190 billion in logistics support for the Department of Defense. That included moving equipment, people, and supplies—everything from a bottle of water to a repair part for an Apache helicopter or an MRAP [mine-resistant ambush-protected vehicle] or the MRAP itself.
Q: Is there a large government logistics support infrastructure? A: We operate 19 [government] maintenance facilities throughout the United States, where we fix equipment when it comes back from the fight. The logistics support infrastructure also encompasses 25 Defense Logistics Agency supply depots around the world, including one in Kuwait that is completely focused on sustainment for Iraq and Afghanistan.
Q: What else is included in that $190 billion? A: That number includes the money we spend with our partners in the commercial sector who also fix that equipment, and it includes repair parts. We manage over 5 million line items—part numbers or different SKUs, in commercial parlance—and of course millions and millions of parts underneath those stock numbers. We are also buying everything from gloves and uniforms to food and petroleum. A good chunk of those dollars are spent in direct support of Afghanistan and Iraq.
Q: How big a role do commercial carriers play in the DOD supply chain? A: About 50 percent of what we move in the air goes on the tail of a plane that says "U.S. Air Force" on the back, a C-17 or a C-5, and about 50 percent goes on commercial aircraft. We try to find the right airplane for the right mission at the right time. All of the carriers will have a commitment to provide us with those planes in a time of need.
Q: Is it the same for sealift? A: With sealift, probably 80 to 85 percent of what we move goes commercial. All sustainment cargo goes commercial, so it is going into a 20-foot or 40-foot container. It may be coming from the United States or it could be coming out of stocks in Germany, Japan, or Korea.
We have a great relationship with the American sealift and American-flag carriers. The U.S. Transportation Command does a great job of building relationships with those carriers, and I spend a lot of time doing that myself. We also have capability to access capacity on those vessels in times of need. We have to have a great relationship with the industry to get that capability provided.
We also are using roll-on roll-off carriers to move military equipment.
Q: Is there a military sealift capability? A: We have an internal organic [government-owned] sealift capacity of our own, the Military Sealift Command, which we maintain in a state of readiness. That means in a time of emergency, for example, on day one, I could load out a brigade combat team from Fort Hood through the Port of Beaumont [Texas].
Q: Who actually operates the DOD supply chain? A: Our multiple commands and military services are executing. The U.S. Transportation Command and the Defense Logistics Agency are the primary two joint executors. Then each combatant commander manages logistics underneath it, and then the military services actually execute the logistic structure for their forces, so it is a massive, massive process.
Q: How does the drawdown in Iraq compare with its counterpart in the first Gulf War? A: If you do it as a comparison with Desert Storm, there was more stuff to bring home from Desert Storm. We had 550,000 troops on the ground in March 1991, when Desert Storm ended. We do not have that size of force on the ground in Iraq today—our maximum during the surge was 160,000.
Q: But we've heard that the drawdown in Iraq, combined with the surge in Afghanistan, makes for the largest military movement since World War II? A: Dr. Ash Carter, the undersecretary for acquisitions, logistics, and technology, remarked in a recent speech that Desert Storm was like checking into a hotel room and checking out. Iraq is like living in a house for seven or eight years and then leaving. We have built up a great deal of infrastructure there, including 350 forward operating bases of varying sizes that we were running [at the peak of the surge]—the largest of which are the size of cities.
Q: How is the drawdown in Iraq going? A: Obviously, Iraq is still constituting its government following the recent elections, so we have what we call a waterfall, a gradual drawdown and then a steeper drawdown until the August time frame. By our metrics, we are ahead of our schedule. We have gotten more equipment, more people, and more containers out of the country than our metrics said we had to get out in order to meet the August time frame. So overall, given all the complexities, we are doing extremely well in pulling out of Iraq.
Q: At the same time that you're overseeing the drawdown in Iraq, you're building up in Afghanistan. How does Afghanistan compare with Iraq? A: It is an incredible challenge. Iraq has roads, paved roads. It has electricity. Afghanistan has been completely war torn for 40 years, and it shows. When the wars in Afghanistan started in 1973, Afghanistan was a Third World nation at the lowest end of the Third World nations. Infrastructure in Afghanistan is almost non-existent.
Q: What do you mean by non-existent? A: Well, let's talk about roads. There are just a few major arteries around the country. The rest are dirt roads, if you want to call them roads. They are more like yak paths.
Q: So how does that compare with what you've seen in Iraq? A: I flew in a helicopter for about an hour and a half from one base in Afghanistan to another. During that time, I probably saw five cars moving down one of the main roads, and I saw no cars out in front of farmhouses and houses along that route. Now if you go to the Al Anbar province in Iraq, you're going to see plenty of vehicles.
Q: OK, we understand that logistics are challenging in Afghanistan, but we understand that getting there is a significant challenge as well. A: When moving to Afghanistan, you are either moving through what used to be the Soviet Union to the north, or the routes through Pakistan. Of course, Pakistan has its own troubles, so those routes are at risk even before you cross into Afghanistan. To the west is Iran, and that isn't an option, for obvious reasons.
Q: Is there anything that didn't come up in the conversation that you'd like to share with our readers? A: We need to talk about contractors on the battlefield. We talked about the supply, the industrial base that sustains our forces, but to support those large bases in the field, we do have a large contractor workforce deployed. A good portion of those people engage in what we would call logistics support in sustaining the base or in repairing equipment that's on the battlefield, or they might be managing some of our supplies for us out there in the battlefield.
That is one of the new realities—we used contractors back in the Revolutionary War, but it is more prevalent today. We could not do this without the great support we have from the contractor community, our partners, and transportation providers through some third-party logistics service providers.
The New York-based industrial artificial intelligence (AI) provider Augury has raised $75 million for its process optimization tools for manufacturers, in a deal that values the company at more than $1 billion, the firm said today.
According to Augury, its goal is deliver a new generation of AI solutions that provide the accuracy and reliability manufacturers need to make AI a trusted partner in every phase of the manufacturing process.
The “series F” venture capital round was led by Lightrock, with participation from several of Augury’s existing investors; Insight Partners, Eclipse, and Qumra Capital as well as Schneider Electric Ventures and Qualcomm Ventures. In addition to securing the new funding, Augury also said it has added Elan Greenberg as Chief Operating Officer.
“Augury is at the forefront of digitalizing equipment maintenance with AI-driven solutions that enhance cost efficiency, sustainability performance, and energy savings,” Ashish (Ash) Puri, Partner at Lightrock, said in a release. “Their predictive maintenance technology, boasting 99.9% failure detection accuracy and a 5-20x ROI when deployed at scale, significantly reduces downtime and energy consumption for its blue-chip clients globally, offering a compelling value proposition.”
The money supports the firm’s approach of "Hybrid Autonomous Mobile Robotics (Hybrid AMRs)," which integrate the intelligence of "Autonomous Mobile Robots (AMRs)" with the precision and structure of "Automated Guided Vehicles (AGVs)."
According to Anscer, it supports the acceleration to Industry 4.0 by ensuring that its autonomous solutions seamlessly integrate with customers’ existing infrastructures to help transform material handling and warehouse automation.
Leading the new U.S. office will be Mark Messina, who was named this week as Anscer’s Managing Director & CEO, Americas. He has been tasked with leading the firm’s expansion by bringing its automation solutions to industries such as manufacturing, logistics, retail, food & beverage, and third-party logistics (3PL).
Supply chains continue to deal with a growing volume of returns following the holiday peak season, and 2024 was no exception. Recent survey data from product information management technology company Akeneo showed that 65% of shoppers made holiday returns this year, with most reporting that their experience played a large role in their reason for doing so.
The survey—which included information from more than 1,000 U.S. consumers gathered in January—provides insight into the main reasons consumers return products, generational differences in return and online shopping behaviors, and the steadily growing influence that sustainability has on consumers.
Among the results, 62% of consumers said that having more accurate product information upfront would reduce their likelihood of making a return, and 59% said they had made a return specifically because the online product description was misleading or inaccurate.
And when it comes to making those returns, 65% of respondents said they would prefer to return in-store, if possible, followed by 22% who said they prefer to ship products back.
“This indicates that consumers are gravitating toward the most sustainable option by reducing additional shipping,” the survey authors said in a statement announcing the findings, adding that 68% of respondents said they are aware of the environmental impact of returns, and 39% said the environmental impact factors into their decision to make a return or exchange.
The authors also said that investing in the product experience and providing reliable product data can help brands reduce returns, increase loyalty, and provide the best customer experience possible alongside profitability.
When asked what products they return the most, 60% of respondents said clothing items. Sizing issues were the number one reason for those returns (58%) followed by conflicting or lack of customer reviews (35%). In addition, 34% cited misleading product images and 29% pointed to inaccurate product information online as reasons for returning items.
More than 60% of respondents said that having more reliable information would reduce the likelihood of making a return.
“Whether customers are shopping directly from a brand website or on the hundreds of e-commerce marketplaces available today [such as Amazon, Walmart, etc.] the product experience must remain consistent, complete and accurate to instill brand trust and loyalty,” the authors said.
When you get the chance to automate your distribution center, take it.
That's exactly what leaders at interior design house
Thibaut Design did when they relocated operations from two New Jersey distribution centers (DCs) into a single facility in Charlotte, North Carolina, in 2019. Moving to an "empty shell of a building," as Thibaut's Michael Fechter describes it, was the perfect time to switch from a manual picking system to an automated one—in this case, one that would be driven by voice-directed technology.
"We were 100% paper-based picking in New Jersey," Fechter, the company's vice president of distribution and technology, explained in a
case study published by Voxware last year. "We knew there was a need for automation, and when we moved to Charlotte, we wanted to implement that technology."
Fechter cites Voxware's promise of simple and easy integration, configuration, use, and training as some of the key reasons Thibaut's leaders chose the system. Since implementing the voice technology, the company has streamlined its fulfillment process and can onboard and cross-train warehouse employees in a fraction of the time it used to take back in New Jersey.
And the results speak for themselves.
"We've seen incredible gains [from a] productivity standpoint," Fechter reports. "A 50% increase from pre-implementation to today."
THE NEED FOR SPEED
Thibaut was founded in 1886 and is the oldest operating wallpaper company in the United States, according to Fechter. The company works with a global network of designers, shipping samples of wallpaper and fabrics around the world.
For the design house's warehouse associates, picking, packing, and shipping thousands of samples every day was a cumbersome, labor-intensive process—and one that was prone to inaccuracy. With its paper-based picking system, mispicks were common—Fechter cites a 2% to 5% mispick rate—which necessitated stationing an extra associate at each pack station to check that orders were accurate before they left the facility.
All that has changed since implementing Voxware's Voice Management Suite (VMS) at the Charlotte DC. The system automates the workflow and guides associates through the picking process via a headset, using voice commands. The hands-free, eyes-free solution allows workers to focus on locating and selecting the right item, with no paper-based lists to check or written instructions to follow.
Thibaut also uses the tech provider's analytics tool, VoxPilot, to monitor work progress, check orders, and keep track of incoming work—managers can see what orders are open, what's in process, and what's completed for the day, for example. And it uses VoxTempo, the system's natural language voice recognition (NLVR) solution, to streamline training. The intuitive app whittles training time down to minutes and gets associates up and working fast—and Thibaut hitting minimum productivity targets within hours, according to Fechter.
EXPECTED RESULTS REALIZED
Key benefits of the project include a reduction in mispicks—which have dropped to zero—and the elimination of those extra quality-control measures Thibaut needed in the New Jersey DCs.
"We've gotten to the point where we don't even measure mispicks today—because there are none," Fechter said in the case study. "Having an extra person at a pack station to [check] every order before we pack [it]—that's been eliminated. Not only is the pick right the first time, but [the order] also gets packed and shipped faster than ever before."
The system has increased inventory accuracy as well. According to Fechter, it's now "well over 99.9%."
IT projects can be daunting, especially when the project involves upgrading a warehouse management system (WMS) to support an expansive network of warehousing and logistics facilities. Global third-party logistics service provider (3PL) CJ Logistics experienced this first-hand recently, embarking on a WMS selection process that would both upgrade performance and enhance security for its U.S. business network.
The company was operating on three different platforms across more than 35 warehouse facilities and wanted to pare that down to help standardize operations, optimize costs, and make it easier to scale the business, according to CIO Sean Moore.
Moore and his team started the WMS selection process in late 2023, working with supply chain consulting firm Alpine Supply Chain Solutions to identify challenges, needs, and goals, and then to select and implement the new WMS. Roughly a year later, the 3PL was up and running on a system from Körber Supply Chain—and planning for growth.
SECURING A NEW SOLUTION
Leaders from both companies explain that a robust WMS is crucial for a 3PL's success, as it acts as a centralized platform that allows seamless coordination of activities such as inventory management, order fulfillment, and transportation planning. The right solution allows the company to optimize warehouse operations by automating tasks, managing inventory levels, and ensuring efficient space utilization while helping to boost order processing volumes, reduce errors, and cut operational costs.
CJ Logistics had another key criterion: ensuring data security for its wide and varied array of clients, many of whom rely on the 3PL to fill e-commerce orders for consumers. Those clients wanted assurance that consumers' personally identifying information—including names, addresses, and phone numbers—was protected against cybersecurity breeches when flowing through the 3PL's system. For CJ Logistics, that meant finding a WMS provider whose software was certified to the appropriate security standards.
"That's becoming [an assurance] that our customers want to see," Moore explains, adding that many customers wanted to know that CJ Logistics' systems were SOC 2 compliant, meaning they had met a standard developed by the American Institute of CPAs for protecting sensitive customer data from unauthorized access, security incidents, and other vulnerabilities. "Everybody wants that level of security. So you want to make sure the system is secure … and not susceptible to ransomware.
"It was a critical requirement for us."
That security requirement was a key consideration during all phases of the WMS selection process, according to Michael Wohlwend, managing principal at Alpine Supply Chain Solutions.
"It was in the RFP [request for proposal], then in demo, [and] then once we got to the vendor of choice, we had a deep-dive discovery call to understand what [security] they have in place and their plan moving forward," he explains.
Ultimately, CJ Logistics implemented Körber's Warehouse Advantage, a cloud-based system designed for multiclient operations that supports all of the 3PL's needs, including its security requirements.
GOING LIVE
When it came time to implement the software, Moore and his team chose to start with a brand-new cold chain facility that the 3PL was building in Gainesville, Georgia. The 270,000-square-foot facility opened this past November and immediately went live running on the Körber WMS.
Moore and Wohlwend explain that both the nature of the cold chain business and the greenfield construction made the facility the perfect place to launch the new software: CJ Logistics would be adding customers at a staggered rate, expanding its cold storage presence in the Southeast and capitalizing on the location's proximity to major highways and railways. The facility is also adjacent to the future Northeast Georgia Inland Port, which will provide a direct link to the Port of Savannah.
"We signed a 15-year lease for the building," Moore says. "When you sign a long-term lease … you want your future-state software in place. That was one of the key [reasons] we started there.
"Also, this facility was going to bring on one customer after another at a metered rate. So [there was] some risk reduction as well."
Wohlwend adds: "The facility plus risk reduction plus the new business [element]—all made it a good starting point."
The early benefits of the WMS include ease of use and easy onboarding of clients, according to Moore, who says the plan is to convert additional CJ Logistics facilities to the new system in 2025.
"The software is very easy to use … our employees are saying they really like the user interface and that you can find information very easily," Moore says, touting the partnership with Alpine and Körber as key to making the project a success. "We are on deck to add at least four facilities at a minimum [this year]."